Automation for goods and services has reached record levels in society. Examples are everywhere from online banking and online retailing to a wide-range of devices and physical appliances that include computing and networking capabilities, which were just wishful dreams only a decade ago. For the most part, these advances have occurred because of breakthroughs in electronics and wireless communications, which have allowed complex processing and network connectivity to be achieved in the smallest of physical devices, such as a smart phone, wearable devices, or other handheld computing devices, for relatively small cost and effort.
These advancements have been embraced by retailers to different degrees and have rapidly transformed their business models. However, an unintended consequence to retailers has been hyper-competition on product price, which has now reached historic portions because a consumer can determine a price for a desired product with near instantaneous speed and without regard to the physical location of the consumer.
For example, Red Laser™ permits a consumer to scan a barcode of a product via his/her smartphone and receive a price comparison on the spot from a variety of online and other physical stores. Thus, retailers are becoming “show rooms” where consumers visit the physical store of a retailer to see and tryout a product but do not buy from that retailer; rather, the consumer often buys the desired product online for a far cheaper price (aka “scan and scram”). The process of using a retailer to try out and view a product is referred to as “show rooming.” Many analysts believe that Best Buy® has experienced severe financial difficulties in recent years because of the increase in consumer “show rooming.”
“Show rooming” is only expected to get worse for physical retail chains as consumers become more conscious about overpaying for products and as the consumers adopt smartphones and apps, such as Red Laser™ with even greater regularity.
If traditional brick-and-mortar stores do not change their business modules, pricing modules, and adopt technology, the stores are destined to become a distant nostalgic memory in society.